Shammie L. Fisher v. Garrison Property

Citations: 162 Idaho 149; 395 P.3d 368; 2017 WL 2298448; 2017 Ida. LEXIS 143Docket: 44117

Court: Idaho Supreme Court; May 26, 2017; Idaho; State Supreme Court

Original Court Document: View Document

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The Supreme Court of Idaho reviewed an appeal from Shammie L. Fisher against Garrison Property and Casualty Insurance Company concerning a judgment that dismissed Fisher’s claim for insurance coverage following the demolition of her house by a renter, Ron Reynoso, who had an option to purchase. The district court had ruled that the insurance policy excluded coverage for such loss. The Supreme Court vacated the district court's judgment and remanded the case for further proceedings.

Fisher owned a house in Boise, covered by an insurance policy from Garrison, valid from March 8, 2012, to March 8, 2014. In January 2012, she entered into a Purchase Agreement with Reynoso, contingent upon financing, with a closing date set for March 31, 2013. The agreement allowed Reynoso to lease the property until closing and included provisions for him to make improvements with the intent to sell for profit. A Rental Agreement was also established, requiring Reynoso to return the property in good condition. However, within two months of renting, Reynoso demolished the house. Although he initially agreed to rebuild, he abandoned the project in August 2013. Fisher subsequently filed an insurance claim, which was denied, leading to her lawsuit initiated on May 27, 2015.

A motion for partial summary judgment was filed by the Plaintiff, asserting that her loss was covered under her insurance policy. In support of her motion, she provided an affidavit stating that she had no knowledge of Mr. Reynoso's intention to destroy the house, detailing improvements discussed, and noting that she had not authorized him to conduct any major renovations. The Defendant argued that the Plaintiff's loss fell under two policy exclusions: intentional loss and faulty, inadequate, or defective work. The Plaintiff contended these exclusions were not applicable. The district court found a genuine issue of material fact regarding the intentional loss exclusion but concluded that the exclusion for faulty work did apply, resulting in the denial of the Plaintiff's motion and the granting of the Defendant's motion for summary judgment, thereby dismissing the case with prejudice. The Plaintiff subsequently appealed the decision.

On appeal, the court applies the same standard as the trial court, considering all disputed facts in favor of the non-moving party. Coverage A of the policy applied to direct physical loss to the Plaintiff's house at 2510 N. 34th Street, Boise, Idaho. The policy included general exclusions, and the Defendant's argument centered on the intentional-loss exclusion, which disallows coverage for losses caused by acts intended to cause loss. The district court recognized a genuine issue of material fact regarding this exclusion, denying the Defendant's summary judgment motion based on it.

The district court addressed the faulty, inadequate, or defective work exclusion in the insurance policy, which excludes coverage for losses caused by various forms of faulty work, including planning, design, construction, and maintenance. However, it allows for coverage of any ensuing loss that is not excluded or excepted. For a loss to be excluded under this provision, it must be a direct physical loss to the Plaintiff's house resulting from these faulty actions.

The court emphasized that interpreting an insurance policy requires looking at the plain meaning of its terms and considering the context of the entire policy rather than isolated phrases. Common words are understood in their everyday usage unless specifically defined otherwise. Exclusions must be strictly construed in favor of the insured.

The Defendant claimed that the loss arose from Mr. Reynoso's failure to complete work on a house after demolishing the Plaintiff's home. The court clarified that the "loss" must pertain to direct physical damage to the dwelling at the specified location, which was the Plaintiff's house, not any future construction intended by Mr. Reynoso.

The policy included a section titled "Your Home Characteristics," which detailed the home’s attributes and emphasized the importance of proper coverage based on these characteristics. The characteristics outlined the home's specifications, including its age, size, foundation, and other features, reinforcing that coverage pertains specifically to the Plaintiff's existing home and not to any potential future construction.

The Plaintiff's loss pertains solely to the destruction of her house by Mr. Reynoso, not to any potential future dwelling he intended to build. There is no provision in the insurance policy covering the failure to construct a new home, as the loss stemmed from the demolition of the existing structure. The Defendant claims the loss resulted from faulty workmanship, but the evidence does not support this. The term "workmanship" implies skill or expertise, which Mr. Reynoso demonstrated during the demolition, but there is no indication that any lack of skill contributed to the destruction. Furthermore, Mr. Reynoso’s actions did not involve repairs, as the house was not in need of any at the time, nor did he engage in construction that directly caused the loss, since the original structure was already demolished. The insurance policy covers risks related to the existing house, not the act of construction, and since the only work done post-demolition was rough framing, it cannot be linked to the loss of the Plaintiff’s home. Ultimately, the destruction of the home, rather than any construction or repair, is the crux of the claim.

The destruction of the Plaintiff’s house was not attributable to Mr. Reynoso's renovation or remodeling efforts. 'Renovate' implies restoring something to good condition, while 'renovation' refers to the act of this restoration. There was no evidence that the Plaintiff’s home required restoration, nor that Mr. Reynoso performed any such work; he demolished the house instead. 

Similarly, 'remodeling' involves altering an existing structure to better suit current needs, such as repositioning walls or updating fixtures. Mr. Reynoso's demolition, which left no structure to remodel, does not align with lay interpretations of remodeling. Although the Plaintiff had authorized Mr. Reynoso to perform certain cosmetic upgrades, there is no evidence he executed any remodeling.

Consequently, the exclusion for faulty, inadequate, or defective work does not apply to this case. The judgment is vacated, and the case is remanded for further proceedings. The Plaintiff's request to hold that the district court erred in denying her motion for partial summary judgment regarding the intentional loss exclusion is noted, but such a denial is not subject to direct appeal. The judgment of the district court is vacated, and the case is remanded for further proceedings, with costs on appeal awarded to the Appellant. Chief Justice Burdick and Justices Jones, Brody, and Pro Tem Kidwell concur.